Supply Chain Management at GCMMF Submitted by, Deepa Raghu I MBA (2011-13) (14.02.

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INTRODUCTION: Amul (Anand Milk Union Limited) one of the most successful brands in India, was the brand name for the dairy products marketed by the Gujarat Co-operative Milk Marketing Federation (GCMMF). GCMMF collected 5.71 million liters of milk a day from vendors like Parmar. GCMMF with its range of products that included butter, cheese, milk powder, sweets, ice creams, and buttermilk, managed to successfully compete with multinationals like Unilevers subsidiary Hindustan Lever, and Nestl in the Indian market. It had also expanded globally to countries in the Middle East, Africa, and to the US. WHAT DOES GCMMF DO? GCMMF was owned by a chain of farmers who had formed a network of cooperative societies. Milk was collected from more than 2.4 million farmers in 11,615 villages twice a day, and tested, graded, and transported to the processing centers. GCMMFs products were marketed through 50 sales offices located across India to 4,000 stockists and 500,000 retail outlets. To combat the monopoly of Polson Dairy in Mumbai, the GCMMF was set up. The seeds of the cooperative movement, which helped turn India into the largest milk producer in the world by 2000. With the major success of the Kaira Union, similar unions were formed in various other districts of Gujarat. This was followed by setting up of new marketing agencies and plants.

PROBLEMS FACED BY AMUL: In the winter season milk collected by the cooperative exceeded the demand from the Mumbai government. This meant that once more the milk producers were forced to sell the surplus milk at lower prices to the middlemen. The solution to this problem lay in converting the surplus milk into other products with a longer shelf life. SUPPLY CHAIN MANAGEMENT: At the start of the GCMMFs supply chain the farmers supplied milk to the VCSs. The district unions processed the milk and took care of making the final product. In 2005, GCMMF had 12 district milk unions. The essential elements included milk production, procurement, transportation, processing, packaging and distribution of final products like butter, cheese, ice-cream, etc to the customers. The logistics of collecting 5.71 million liters of milk each day, processing them at 23 plants of 12 dairy unions, and sending them to more than 500,000 retailers was highly complicated. However, the coordination among producers and distributors ensured the smooth functioning of the supply chain. The structure of GCMMF guaranteed that the farmers interests would be given prime importance. It coordinated with different unions to decide on the product mix. PROCUREMENT: Activities at the village level comprised developing and servicing the VCSs, increasing milk collection, procuring milk, and transporting it to the chilling and processing units twice a day. The staff was responsible for feeding animals, collecting milk, payment, transportation for processing. The average milk procurement in the financial year 2004-05 was at 5.88 million kilograms per day, as against 5.11 million kilograms per day in the financial year 2003-04. More than 4,000 Automatic Milk Collection Units (AMCUS) were installed at the VCSs by 1996 to record information. The milk supplied to Mother Dairy was sold through bulk vending booth and rail milk tankers. PROCESSING: After the union received the milk, it was tested for quality, and it was sent for processing. If the milk was found to have high acidity, it was used to make

buttermilk. Raw milk was sent through a filter, clarifier and was pasteurized. The cream was separated, skimmed milk was obtained. According to demand, the unions packed a n d d i s t r i b u t e d the milk. The cream was marketed as Amul Fresh Cream. For manufacturing butter, the cream obtained from the milk was pasteurized and stored at 14 degrees centigrade for about eight hours. The cream was then sent through a balance tank and through a heat exchanger and churned where the temperature was maintained between 6-13 degrees centigrade. The butter grains were washed twice and treated under vacuum mainly to remove any residues of the buttermilk from the butter. To make table butter, salt, brine, and color were added to unsalted butter, blended, treated under vacuum and sent to a butter silo from which the butter was packed in chiplets. In order to produce one kilogram of butter, 13 liters of milk was required. To obtain baby food concentrate, the milk was vacuum evaporated, subjec t to spray and then vitamins, minerals, and sugar were added. GCMMF made cheese, which was totally vegetarian. Rennet was added to the milk to obtain curd which was sold under the name Masti Dahi. The curd was subjected to other processes like cheddaring and vacuumizing to obtain different varieties of cheeses. DISTRIBUTION: GCMMF coordinated with various unions to get a regular supply of milk and dairy products. The processed milk and dairy products were procured from district dairy unions and distributed through third party distributors and were closely monitored. Third party distribution depots, managed by exclusive GCMMF distributors, were used to distribute GCMMFs products. These distributors served the retail outlets all over the country. GCMMF ensured nationwide product availability. Hence, Amul ice-creams were made available through push carts, small shops, public call offices, chemists, restaurants and bakeries. Amul also set up its own brand of parlors called Utterly Delicious. CONCLUSION: The main objective of GCMMF was to market milk and dairy products and thus help in the economic development of the agriculturalists. After India became a part of WTO, there was greater pressure on the government to liberalize the milk sector. However, the Indian government tried to limit foreign competition by imposing high quality standards.